Indonesia hopes new Greenfields milk plant will reduce import needs

By Jim Cornall contact

- Last updated on GMT

Greenfields expansion in Indonesia has drawn praise from the country's government, as it looks to decrease its dependence on dairy imports,
Greenfields expansion in Indonesia has drawn praise from the country's government, as it looks to decrease its dependence on dairy imports,
Indonesia is looking to ramp up local production to reduce the country’s need for imports.

Indonesia’s Minister of Industry said the development of the milk processing industry needs to be done through a partnership program with dairy farmers.

"The partnership program is expected to bring a multiplier effect that will spur regional economic growth, increase local revenue, and employment, so as to prosper the community,"​ said Minister of Industry Airlangga Hartarto at the inauguration of Greenfields’ plant in Blitar, East Java.

Greenfields’ first factory in Babadan, East Java produces 40m liters of milk each year, with a second facility, in nearby Malang, expected to run at full capacity, 70m liters of milk annually, in 2018.

New plants

Hartato praised Greenfields, saying he expected the company to remain committed to continuously improve investment, productivity, quality, and better livestock cultivation methods in the country.

The Minister also added Greenfields intends to build five additional plants in the country in the future.

"This investment reached Rp612bn ($44.3m), which directly partnered with 250 farmers and as many as 3,000 indirect workers,"​ he said, adding the investment played a major role in encouraging the national and local economies.

Hartato said the development of dairy farms can reduce dependence on imported raw milk, and announced the country is targeting a 41% increase in the supply of raw milk in the country by 2022.

He added that because the raw materials cannot be supplied domestically, imports including milk powder from Australia, New Zealand, the US and EU are still necessary.

“There is still plenty of room for those who want to invest to deepen the structure of the dairy industry in Indonesia,"​ Hartato said.

The Ministry of Industry has proposed providing fiscal incentives for industrial sectors to contribute in growing the sector and the national economy, he added.

Training farmers

CEO of AustAsia Dairy Group (which includes Greenfields) Edgar Collins said, with the operation of this second farm, there will be a significant increase in domestic fresh milk production, which will strengthen the position of Greenfields as the top producer of fresh milk in Indonesia.  

"We also want to introduce modern dairy farming practices as a model to improve the productivity and quality of fresh milk domestically,"​ Collins said.

He noted the company is building a Greenfields Dairy Institute Foundation, to train more than 800 dairy farmers annually to improve their skills to increase productivity.

"This will certainly increase their income,"​ he added.

Since 2000, Greenfields has been a major exporter of fresh milk products from Indonesia. Currently around 20% of its production is exported to Hong Kong, Singapore, Malaysia, Brunei, Philippines, Myanmar and Cambodia.

Related topics: Markets, Emerging Markets, Fresh Milk

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